Valentine’s Day has always been a crucial time for retailers to boost their sales, but according to a recent report by e-commerce provider Visualsoft, there has been a surprising drop in Average Order Value (AOV) despite an increase in overall revenue leading up to the holiday. As businesses gear up for Valentine’s Day 2025, the insights provided by this data are invaluable for brands and stores looking to stay ahead of the competition.
Immy Ewbank, Senior Digital Strategist, pointed out the ‘lipstick effect’, where consumers indulge in small luxuries to uplift their spirits, even amidst a cost of living crisis. This underscores the significance of customer loyalty and opportunities to win back customers for businesses. Ewbank suggests that brands should focus on loyalty programs, ‘refer a friend’ incentives, and carefully curated gift guides to enhance customer engagement. Smaller items or ‘little luxuries’ are highlighted as ideal choices for thoughtful and budget-friendly gifts, with opportunities for upselling to increase Average Order Value. In a world of instant gratification, offering next day delivery through a reputable courier service can instill confidence in consumers and sway their purchasing decisions.
The report by Visualsoft delved into various sectors such as jewellery, fashion, gifts, health, lingerie, and beauty, unveiling a trend of increasing revenue year over year but a decline in Average Order Value. While the fashion sector saw a notable 33% surge in revenue, categories like health, beauty & cosmetics, and lingerie & underwear also experienced growth. Surprisingly, jewellery sales saw a slight decrease of 0.5%, deviating from expectations for this romantic season. Nevertheless, the overall revenue across sectors surpassed inflation rates, indicating a shift towards more self-indulgent purchases or thoughtful gifts rather than extravagant presents typically associated with Valentine’s Day.
The data in the report shed light on a pattern of smaller basket sizes, with the fashion sector seeing a 15% decrease, beauty dropping by 2%, jewellery declining by 11.%, and lingerie & underwear plummeting by 24%. In the midst of a cost-of-living crunch, retailers are focusing on attracting more sales by catering to price-conscious shoppers. Despite some individuals being wary of consumerism, there is still a desire to celebrate in a modest way, as evidenced by the increased searches for ‘promise rings’ and ‘charms’.
Mobile orders proved to be particularly robust in the fashion, health beauty & cosmetics, and jewellery sectors, with a surge in mobile shopping indicating a preference for convenience and accessibility. However, purchases in the lingerie & underwear category exhibited a trend towards more deliberate decision-making, with a lower proportion of orders placed through mobile platforms.
Ash Wright, VP of Commercial at Visualsoft, stressed the importance of adapting to evolving consumer behaviors, especially among younger demographics who prioritize value and ethics. To attract a broader consumer base, brands are advised to offer competitive discounts while upholding their core values. By focusing on repeat clientele and smaller transactions, retailers can drive growth by prioritizing customer engagement and loyalty.
In conclusion, while Valentine’s Day continues to be a significant revenue generator for retailers, the changing preferences and shopping habits of consumers necessitate a strategic and adaptive approach to sales and marketing. By staying attuned to shifting trends and placing a premium on customer loyalty, businesses can leverage the opportunities brought about by this romantic holiday season.
For more insights on consumer behavior and retail trends, check out the following links:
1. Forbes: Retail Trends
2. Retail Dive: Latest Retail News
